Imaging services outsourcing

It is win-win situation for patients, hospitals and service providers

By Dr Vidur Mahajan

vidur2Most imaging services outsourcing deals are built on a revenue-share model, wherein the ‘parent’ hospital provides the space, electricity, HVAC and other ancillary support for the department, and the service provider puts in equipment and manpower, getting all managerial control over services rendered at the department. Generally, all billing is done by the hospital, ensuring that the service provider only needs to focus on providing high-quality services, and nothing else. General discussion points revolve around the tenure, scope of work, timing of the services and the revenue share. That said, there can always be finer nuances in each contract based on the size of the hospital, services to be rendered and various other logistical concerns.

A good way to know about the finer intricacies of the model and its inherent benefits is to take a stakeholder approach. Below are some thoughts on how this model can benefit each of the three stakeholders – the patient, the hospital and the imaging services provider.ost imaging services outsourcing deals are built on a revenue-share model, wherein the ‘parent’ hospital provides the space, electricity, HVAC and other ancillary support for the department, and the service provider puts in equipment and manpower, getting all managerial control over services rendered at the department. Generally, all billing is done by the hospital, ensuring that the service provider only needs to focus on providing high-quality services, and nothing else. General discussion points revolve around the tenure, scope of work, timing of the services and the revenue share. That said, there can always be finer nuances in each contract based on the size of the hospital, services to be rendered and various other logistical concerns.

It is important to note that in such an arrangement, it is generally the patient that is benefitted the most. If we take Mahajan Imaging, for example, a patient at any hospital where we provide radiology services stands to benefit not only from Mahajan Imaging’s doctors present in the hospital itself, but also from the collective intelligence and experience of the 50-odd doctors across the organisation. Regular case discussions, seamless second opinions from experts and centralised quality monitoring, all add to the quality delivered to the patient. For example, all mammography scans (X-Ray and MRI) at Mahajan Imaging are reviewed by our mammography expert irrespective of where and in which hospital the patient was scanned. Having robust IT systems and quality processes also adds tremendous value from the patient’s perspective.vidur1

The other key beneficiary, and driver of this movement, is the hospital itself where the imaging services are being provided. A full-fledged high-end radiology and nuclear medicine department in a hospital that has more than 300-400 beds involves a capital expenditure of almost Rs 20 crore, a direct ‘saving’ for the hospital if it decides to outsource the department. Additionally, providing high quality imaging services is totally dependent on putting together a stellar team of specialists and giving them appropriate freedom to operate – outsourcing imaging services ensures that the hospital does not need to partake in day-to-day administration and can leave that to an organisation that specialises in the same. Also, outsourcing imaging services to a large imaging company has the additional advantages of better quality reporting (by leveraging the larger group) and better manpower back-up (for example, if a doctor goes on leave, a replacement can come in from another location).

Since the hospital itself is not investing in the equipment, this also presents a situation wherein new technology can be introduced into the hospital by the imaging provider. Given the critical role of imaging in governing clinical outcomes, having to not worry about the imaging services is a great boon for almost any medical administrator.

For the imaging provider, having an imaging department in well-run large hospital can mean sustainable revenue in a strong academic environment. This is the ideal situation for a well-meaning imaging provider since it implies that the provider need not focus on sales and marketing, but instead on providing the best possible services to patients at affordable costs. That said, it also means significant risk (at the outset) for the imaging provider since the success of the department is tied to the success of the hospital and so is the breakeven. It is important to note that breakeven periods for imaging departments in hospitals are typically longer than stand-alone centres since hospitals generally have a longer ramp-up period, which is usually indicated in relatively longer contract terms (12 – 15 years) that imaging departments have.

In summary, if you are thinking of opening a new hospital or getting in some new imaging equipment, or simply unable to manage your existing imaging department, consider outsourcing your department but definitely ask yourself about the bandwidth of the potential imaging partner. Will they add incremental value in terms of the quality provided? What kind of network do they have now and how will that be leveraged? What kind of equipment will the partner bring in and is it superior to what the hospital would have bought itself? These basic questions should help you arrive at the best possible answer for your situation.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s